Paul Howes: Tactics versus compact - The art of union warfare

I've always thought The Art of War, the ancient Chinese treatise on military tactics, was a book primarily read by corporate psychopaths. Or at least that it was a book bought for such men by their wives, so they could feature it prominently on their book

07 February 2014

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Howes: Time for concessionsPaul Howes, head of the Australian Workers Union, believes Australia's industrial relations system is dragging productivity down.

I've always thought The Art of War, the ancient Chinese treatise on military tactics, was a book primarily read by corporate psychopaths. Or at least that it was a book bought for such men by their wives, so they could feature it prominently on their bookshelves.

''All warfare is based on deception," a Wolf-of-Wall-Street-type might mutter to himself as he makes a trade on an insider tip.

''To know your enemy, you must become your enemy," he whispers as he shorts a juicy stock.

Illustration: michaelmucci.com

But it seems Paul Howes, the head of the Australian Workers Union, has also been taking notes from the playbook of Sun Tzu.

The most telling line of Howes' speech to the National Press Club on Wednesday came towards the end.

''Nothing throws a sworn enemy off their guard quicker than a genuine concession,'' he said gnomically.

He went on to give a genuine (sounding) concession by saying that ''the union side'' of the industrial relations divide could admit there had been a pattern of unsustainable wages growth in ''some parts of the economy''.

He singled out the ''leapfrog wage outcomes'' in the offshore sector as unsustainable for the long term.

''We could be pricing ourselves out of the market,'' he said.

Howes also suggested that unions and business extend a hand to each other to negotiate a ''grand compact'' to rein in high wages and lift productivity. This invited comparisons with the famous Hawke/Keating Accord, and evoked strong headlines, as Howes must have known it would.

Howes used his speech to argue, very reasonably indeed, that the last decade or so of industrial relations had been a see-saw: each side biding its time before the pendulum swung back, at which point it could use the momentum to exploit its enemy.

As a consequence, neither business nor the unions has any certainty, and productivity has suffered.

But it is difficult to escape the conclusion that Howes' speech was an assault-dressed-as-peace-offering, timed because he knows the union movement is currently on the wrong end of the see-saw.

Union membership is at an all time low (20 per cent of full-time employees belong to a union). Anti-union sentiment is strong, and not just on the conservative side of politics, where the government has this week asked the Fair Work Commission to assess whether the minimum terms and conditions built into awards are still relevant, and where an internal Liberals dispute has erupted over whether or not workers' wages and conditions at the SPC Ardmona cannery are too generous.

Howes tacitly acknowledged this ill-sentiment when he criticised the aggressively macho, bikie-and-thug-flecked elements of the movement (a not-so-subtle dig at the Construction, Forestry, Mining and Energy Union), and when he used loaded language to decry the union ''traitors'' who rip off their members.

One of these alleged traitors is former MP and Health Services Union boss Craig Thomson, against whom no one in Labor or the union movement's leadership spoke until he moved to the cross-benches in 2012. The allegations against him had been around since about 2008.

Former prime minister Julia Gillard inflicted irreparable damage on Labor by continuing to support Thomson as the stench of his alleged corrupt dealings grew stronger. Gillard was then damaged by historic allegations against her from her time working as a solicitor for the Australian Workers Union. There was absolutely no evidence Gillard had done anything wrong, but it brought to light yet another union corruption scandal with tendrils encircling the government.

Gillard's puzzling stance against same-sex marriage was put down, by many, to her reliance on the support of Joe de Bruyn, the head of the conservative Labor Right Shop, Distributive and Allied Employees Association. And, of course, she was famously backed into the job by a coalition of Labor Right factional warriors, with Howes among them.

If the union movement has a ''brand'', then six years of Labor government did a lot to tarnish it. Its reputation will only take a further battering when the federal government establishes a formal judicial inquiry, possibly a royal commission, into union corruption, on which an announcement is expected as early as next week.

Howes knows this, which is why he made a bold effort on Wednesday to get out in front of the bad press, to move the conversation away from union corruption and onto his reasonable-sounding idea of a ''grand compact'' between unions, business and government.

Howes was presenting as a peacenik who just wants to sit down with business/government; if they don't want to, well, they are the recalcitrant ones, not him. As my Age colleague Ben Schneiders wrote on Thursday, this is in contrast to Howes' previous rhetoric towards business, which has been insulting in the extreme.

In 2011 he accused Rio Tinto of ''sucking the blood'' out of its workforce and warned the company's management: ''You cannot hide behind your slimy, grubby mates in the Coalition because we're coming after you.''

Would you sit down at the table with someone who spoke to you like that?

The idea of a ''grand compact'' is a grand gesture, easily made because it's very unlikely to ever be accepted by a Coalition government, or by business. And while Howes said that ''the industrial relations system is dragging us down'', the only specific area of possible concession he named was the high wages in the offshore sector - this is the lowest-possible hanging fruit. High offshore sector wages is hardly a mainstream, ''middle Australia'' issue, and as the mining boom tapers off it will be less of a problem anyway.

When asked about Howes' ''grand compact'' idea on Thursday, the Prime Minister sounded unconvinced. ''That was very 1980s, all of that,'' Tony Abbott said.

Despite Coalition assurances to the contrary before the election campaign, it does appear the government is preparing a push on minimum wages and conditions, including penalty rates.

This is despite the fact that economy-wide, wages growth is at historically low levels (a point Howes made in his speech, and which is true across the world).

The union movement cannot afford to get stuck in the '80s - unable to admit that the economy is now digital and seven-days-a-week. The stakes for workers are too high.

Howes made some interesting noises this week, but it is difficult to believe he wants to lay down arms in the unions-versus-capital war.

More likely he is taking another piece of Sun Tzu's centuries-old advice: ''Appear weak when you are strong, and strong when you are weak."

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